What outcomes are possible if both employees are rational

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An ice cream company has hired two sales persons to run two ice cream stores on a beach. These two employees will receive a fixed salary regardless of the number of ice creams that they sell and they have to charge the same price set by the company. The only decision that they have to make is where to locate the store that they have to run. There are 10 positions available on the beach and costumers are uniformly distributed along this beach. Their goal is to minimize the work load by minimizing share of costumers who come to their store. Costumers will choose the store which is closest to them. Analyze the strategies for each employee. What outcomes are possible if both employees are rational?

Reference no: EM13735934

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